[ILLUSTRATION OMITTED] The primary financial metric on which the board and management should focus is the growth of economic profit over time.
What does EP stand for?
EP stands for Economic Profit
This definition appears frequently and is found in the following Acronym Finder categories:
- Business, finance, etc.
See other definitions of EP
We have 85 other meanings of EP in our Acronym Attic
- Earth Penetrator
- Earth Prayer
- Earth Probe
- Earth Protectors
- East Point (southwest Atlanta, GA, USA)
- Eastern Pacific
- Eastern Province (South Africa)
- Easy Pass
- Ebony Polished (piano manufacturing)
- Ecole Polytechnique (Paris, France)
Samples in periodicals archive:
Economic profit (or loss, if negative) is calculated by subtracting economic costs from revenue.
Knight Vinke argued that economic profit allows companies to pay a bonus even if other performance measures - such as total shareholder return - do not reach the target.
Analyzing the situation Felix Barber and Rainer Strack of the Boston Consulting Group devised a means of reformatting a traditional measure of economic profit to one that is meaningful for people-intensive businesses.
The taxpayer's objective must be to achieve an economic profit independent of tax considerations" (George Gianaris, TC Memo 1992-642).
Typically, a negotiated royalty rate will be lower than the projected total economic profit contribution from a patent to provide economic incentives for both licensor and licensee.
Those circumstances include: * the partners' relative contributions to the partnership; * the partners' interests in economic profits and losses (if different than their interests in taxable income or loss); * the partners' interests in cash flow and other distributions; and * the partners' rights to capital distributions upon liquidation.
If some form of economic profit is used (such as net income less the cost of capital--both debt and equity), is the formula appropriate in terms of the current cost of capital?